Despite double-digit increases in revenue, setting records for both the fourth quarter and year, Alliance Resource Partners suffered double-digit earnings declines due to higher operating costs and a loss of synfuel-related benefits.

The Tulsa-based coal producer dramatically boosted its income projections for 2009, but Wall Street turned a deaf ear, leaving Alliance units to fall 7.6 percent Wednesday on the Nasdaq Exchange.

"For the eighth consecutive year, ARLP posted new records for coal sales, production volumes and revenues," said Alliance President and Chief Executive Joseph W. Craft III. "With a solid customer base, substantial coal supply commitment levels, visible cash flow growth and ample liquidity, ARLP is well-positioned to build on this strong performance in 2009.

But with the entire world caught in a recession, Craft warned that demand and price volatility caught executives off-guard, leading Alliance to moderate its unitholder distribution goals.

"It now appears ARLP's coal price realizations for 2009 and beyond will be lower than previously expected," said Craft. "Fortunately, we have substantial future production committed under contracts at price levels that should allow ARLP to achieve substantial growth over 2008 results."

Although Craft outlined strong potential for both 2009 and 2010, analyst M. Jake Dollarhide suspected Wall Street turned on ALRP units Wednesday over its cash distribution.

The coal producer actually increased that to 71.5 cents per unit, payable Feb. 13 to unitholders of record Feb. 6. But Dollarhide said that 22-percent hike did not meet expectations.

"When you promise your kids a bicycle and then you don't give them a bicycle, they're disappointed," said Dollarhide, chief executive of Longbow Asset Management of Tulsa.

Alliance's Nasdaq Exchange units fell $2.55 Wednesday to $30.82, its 177,955-unit trading volume 49 percent above its average daily volume.

Net income for 2008 fell 21.2 percent to $134.2 million, or $2.41 per diluted unit, from $170.4 million, or $3.05 per unit, the prior year.

That fell far short of the $2.63-per-unit forecast in an analyst survey by Thomson Financial/First Call, as well as the $2.58 projected by Zacks Investment Research.

Revenue jumped 11.9 percent to $1.16 billion from $1.03 billion in 2007. Alliance attributed that to records for tons produced and sold. Its coal sales volumes rose 9.9 percent to 27.2 million tons.

Alliance pinned part of the income decline on $28.5 million in lost synfuel benefits last year. Higher production and sales volumes also boosted operating expenses 33.8 percent to $218.6 million.